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Great article - very interesting!
The first thing I do when our issue of This Old House comes in the mail is flip to the back page & see "savethisoldhouse". Sometimes it's a house that needs to be moved but mostly it's old houses with some history that have been sitting a while.
This month it's a great looking rowhouse in an "up-and-coming" neighborhood of Baltimore for $59,000! It needs everything - but the article says similar, renovated properties in the same block are valued at $400,000+.
A bad location can be an 'incurable defect' that will forever hold down the value of a property.
The one with a train beside it might seem tolerable unless the railroad starts using the route more often.
The new 2:00 AM freight is not going to be very tolerable.
Spark plus and buried car pieces and parts are not nearly as serious, until the EPA decides there is also oil and antifreeze.
The present owner is on the hook for the cleanup.
Caveat emptor, and make sure you understand ALL the risks and issues.
Location is everything to me. You can't change it or remodel it. Personally I pay for lifestyle, location holds its value.
Train tracks, never.
I'm glad someone is willing to buy bad locations, but not me.
I think you can purchase a "dump" in a good location but even a "castle" in a bad location is very risky! Location is really the foundation of real estate.
There is nothing wrong with "bad location" as long as you are realistic about it. If you are getting a "great deal" on the property because of location, a future buyer is going to get the same "great deal" when you go to sell it. It won't seem like such a great deal to you at that point though.
Bad location ONLY helps if you are ahead of regentrification or real estate boom. If purchase any other time - you are either paying too much or risk never having property value increase because bad neighborhoods are the first to feel economic downturns which causes crime.
Hmmm. Don't forget you most likely will have to SELL in a bad location and that is tough!
I once had to fill out a disclosure form for proximity to railroad tracks. The property I sold was within two miles of some tracks, so the Realtor insisted that information be disclosed.
I asked her where in the world this particular disclosure requirement came from. She said that some buyers had buyer's remorse and sued because the property was "near" a railroad line and that fact had not been disclosed.
Apparently, they won, and the railroad track disclosure form was the real estate community's response. Whatever happened to due diligence? It's not like a seller can hide a railroad track.
A lot of it depends on personal tolerance and lifestyle needs.
I remember visiting some cousins at their place in the Bowery years ago and they had to wake up a homeless person from their front steps so they could get in. If that's what I came home to day after day, I'd find it pretty depressing, but to them it was just part of life in the big city.
Would I? Never. I'd buy a lesser house in a better location.
One of the greatest assets of our home is its location. We built a smaller home among old and new larger homes on one of the most desired streets in a desireable town. I could sell the lot alone many times over just because of *where* it is. When the house across the street was on the market the listing intoduced it as being "On Coveted ______ Road". The value of some of the smallest older homes along this street is entirely in the land.
"The value of some of the smallest older homes along this street is entirely in the land."
Plus lower taxes and utility costs!
Never! My safety and well-being are far more important than price, with regard to the stories of the bad neighborhoods.
Tribolite - your post is exactly a good scenario if someone can land it.
The Bowery is one of the most desirable neighborhoods in NYC today as it has recent additions of restaurants, Whole Foods, YMCA, art gallery, etc. If your friend kept the property they are doing very well today financially. However, city re gentrification happens more quickly vs. outside of the city.